IMO the proper term should be Internet of Digital Things (IDioT). The last thing I want is hackers taking control of my IDioT fry-pan and ruining my bacon.
If they don't serve bacon, will you eat your propeller beanie? [Just kidding!]

Internet of Digital Things would be IoDT
But that doesn't negate your point about the bacon -- I currently have a team devoted to the task of trying to ensure that bacon will be served (will you be joining us? :-)

You mentioned Big Brother, if you happened to see the Fox special "Your Secret's Out" you might have learned about the construction of the NSA's new Utah Data Center in Bluffdale and their 5 zettabyte storage facility. (Not to mention a 3 million gallon water tank just to cool all the CPUs.) Yikes, zettabytes? I admit I had to look that one up myself - and IoT is still mostly on the drawing board! BB is here now, whether we admit it or like it or not...

I really think that our biggest risk is Little Brother (corporations) rather than Big Brother. The government will, of course, be trying to get involved in regulation and monitoring with some level of success, but they tend to not be all that effective at a lot of things and we can pass laws to limit what they can do.
My biggest fear is the insurance companies. Today, some car insurance companies are offering GPS driving monitoring system with the promise of discounted rates (unless you happen to drive five-over from time to time). I'm guessing it won't be too long before they reverse their marketing and insist that drivers use one or be charged more. Probably not long after that, they'll start dropping drivers at the first sign of anything that their committee considers unsafe or undesirable.
I could envision a time when health insurance companies require activity monitoring devices to be worn at all times. Have a smoke? No coverage for lung cancer of emphysema. Eat fast food too often or don't exercise enough? No coverage for any weight related conditions.

With all the hype about the internet of things, it makes you sit and consider what is a connected device and what are we actually trying to monitor?
In laymans terms, the connected device is anything that provides feedback on a condition. That's fine for dumb devices like PVRs, furnaces, air conditioners and stoves ... but what about smart devices? Ones where the same input does not automatically give the same output. I'm talking about human beings ... and we are also "things" in the internet of things.
Can you imagine a world where your political representative is so in tune with their constituents that they can get immediate feedback from them and vote on propositions accordingly? (Caveat: It's well known that your representative will automatically vote according to party lines no matter what the voters say ... a sad point for democracy) But imagine, if you will, that the people are in control, what they say matters in real time and can be monitored as such. That is the "True Internet of Things" and not just some passive monitoring device on the network that spits out pre-programmed responses. It's dynamic, not static. Ever evolving like the human condition.
Whomever coined the term 'Internet of Things' never saw the big picture ... or maybe I should say, whomever reported on the guy that coined the term internet of things never understood the big picture. We're just as important as the devices we manufacture, so why aren't we included in the conversation?

Indeed the current administration is COUNTING on the people getting disgusted with private health insurers so they can force the single-payer "solution" down our throats. The government will NEVER do anything to prevent this, they stand to benefit by encouraging it!!

Probably because social media have already made that "people" part of IoT happen. People can already get to their local representatives in close to real time, with their own (often inane) thoughts.
But of course, Max's main point is there's something called "the law of unintended consequences." Undeniably true. I don't think the average home today is anywhere close to being as "connected" as it could be, but by the same token, I ain't about to obsess over it.
These discussions are actually quite old. There was a French comedy movie from the 1950s, called "Mon Oncle" (my uncle), that addressed this very topic. This guy had his whole house wired up with sensors, so for instance, the fountain in the front yard would automatically turn on when visitors arrived.
Silly stuff like that. We've had the twechnology to do this for a very long time, even if not Internet-connected. It hasn't happened yet. I wouldn't stress.

And here's my apolitical counterpoint to myself in favor of the IOT.
Far too frequently, usually when I'm running late, I'll run out the door to hop in my car only to find that the windows are frosted over and I should have left the house a few minutes earlier so I'd have time to scrape ice. In a similar scenario, again usually when I'm running late, I'm heading out of town only to realize that my car is nearly out of gas.
Some IOT goodies could talk to my smart phone, that I use as my alarm clock, and have it ring a few minutes early with an announcement that I'll need to scrape ice, get gas or something similar. That would be cool.
Here's another one that might help the person who hates doing laundry enough to put it off until the very last minute. If all of my pants and shirts had little IOT chips, they could transmit "clean" or "dirty." If I go to bed without anything transmitting "clean", I could be reminded to get back out of bed and finally do some laundry.
And of course, there's always the dreaded: "Did I leave the oven on?" when you're miles from home. I'd love an IOT device to either let me know I turned it off or turn it off for me.

I love the laundry idea! Imagine having an app that polled all your clothes and reported how many shirts, pants, socks, etc. you have in the "clean" and "dirty" categories, then told you how many laundry loads the dirty ones represent.

Seriously, though, we need a better name. I first thought it was a clunky translation when I first encountered the term on one of my (German) employer's intranet pages. I was horrified to find it's the correct one..